The government is planning to develop a guideline allowing renewable energy projects in Bangladesh to earn and trade carbon credits under internationally recognised mechanisms, aiming to unlock a new financing stream for the sector.
According to the draft National Renewable Energy Development Strategy (2026-2030), published by the Power Division on 1 July, the framework will outline how green projects can generate credits in line with the Bangladesh Carbon Market Framework, Article 6 of the Paris Agreement, the Enhanced Transparency Framework (ETF), and the country’s Nationally Determined Contribution (NDC) tracking system.
Under the proposal, projects targeting international carbon markets must obtain a government-issued No-Objection Certificate and a Letter of Endorsement.
They will also need to comply with stringent international monitoring, reporting, and verification (MRV) requirements to ensure emission reductions are accurately measured. Carbon credits, which reward the reduction of greenhouse gases, can be earned by replacing fossil fuel-based electricity and sold globally to create additional revenue.
The Power Division has invited stakeholders, including government agencies, experts, and civil society, to submit feedback on the draft by 6 July, ahead of the strategy’s finalisation at a Bidyut Bhaban meeting on 7 July.
New financing measures
To address limited sector financing, the draft introduces several risk-reduction measures.
It proposes a state-backed payment guarantee scheme to ensure timely payouts for investors, alongside a dedicated clean energy fund to catalyse private investment. Furthermore, to ease early-stage financing constraints, developers may be permitted to submit a Preliminary Letter of Support or a Comfort Letter instead of a formal commitment letter prior to project approval.
This pragmatic shift acknowledges that banks and financial institutions typically cannot issue full lending commitments until project tariffs are officially finalised.
Strong focus on rooftop solar
Rooftop solar is a core priority under the strategy. The government plans to equip ministries and public buildings with solar systems via private investment, with developers recovering costs through electricity bills under the existing net metering system, which feeds excess power into the grid.
The strategy mandates net metering for industries in Economic and Export Processing Zones.
It also proposes amending the National Building Code to require rooftop solar on 30% to 70% of the roof area of all new residential, commercial, and industrial structures. Implementation will be supported by a Rooftop Solar Calculator to determine benchmark costs, bi-annual equipment price reviews, and generation-based incentives.
Grid, utility-scale projects and irrigation
For utility-scale solar projects, the draft recommends the wider adoption of competitive bidding, public-private partnerships, and Merchant Power Policy models.
To safeguard grid stability as the share of renewable energy expands, the strategy also proposes the mandatory integration of Battery Energy Storage Systems (BESS).
While wind power is deemed to have limited overall commercial potential, coastal areas and parts of the southern hill tract region are highlighted as the country’s most promising locations for wind generation.
Additionally, the strategy outlines plans to gradually convert roughly 1.2 million diesel-powered and 4,00,000 electric irrigation pumps to solar power.
This transition is expected to curb costly diesel imports, alleviate pressure on the national grid, and provide farmers with an alternative revenue stream by allowing them to sell surplus electricity during the off-season.
